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Wet vs. Dry Lease Agreements in Aviation Planning

Aircraft lease agreements are high-value, high-risk contracts. One poorly drafted provision can expose you to regulatory violations, unexpected maintenance costs, or significant liability.

Allegis Law serves as your aircraft leasing attorney from Sandy, Utah, advising business owners, operators, and investors nationwide. We draft, review, and negotiate wet and dry aircraft lease agreements with a dual focus:

  • Strong legal protection
  • Smart tax positioning

Our goal is simple. Protect your aircraft. Protect your balance sheet. Align the lease with your broader business strategy.

Wet Lease, Dry Lease Agreement, and ACMI Structures

ACMI leases are typically used by airlines, cargo operators, and charter operators that need aircraft capacity without owning or crewing the aircraft themselves.

The difference between a wet lease and dry lease agreement is not cosmetic. It defines control, compliance, and cost allocation. A business owner leasing an aircraft for executive travel, for example, needs a different structure than a charter operator placing the aircraft into commercial service.

Dry Lease Agreements

Under a dry lease agreement, the lessee provides crew and assumes operational control. A properly structured dry lease commonly supports Part 91 operation. The FAA evaluates operational control case by case under FAA Advisory Circular 91-37B, based on the facts of how the arrangement functions in practice.

Your agreement must clearly address:

  • Operational control
  • Maintenance responsibilities
  • Insurance coverage
  • Return conditions

Ambiguity in a dry lease can create FAA compliance issues and insurance disputes.

Wet Lease Agreements

A wet lease typically includes aircraft and crew provided by the lessor. Operational control determines which FAA rules apply, based on the substance of the arrangement rather than the label on the lease.

Under FAA Advisory Circular 91-37B, Truth in Leasing, the FAA looks at who directs the crew, aircraft, and flight before treating an arrangement as Part 91 or as commercial carriage requiring Part 119 certification and Part 135 compliance.

A wet lease attorney reviews the agreement against these operational control factors and ensures it clearly allocates:

  • Crew authority
  • Maintenance standards
  • Liability coverage
  • Payment structure

Clarity here prevents regulatory scrutiny and cost overruns later.

Aircraft Leasing Meets Tax Strategy

Aircraft leasing decisions affect more than flight operations. They influence depreciation, deductions, and entity structuring.

If you are weighing ownership against leasing, review how depreciation rules may apply under Section 179 and bonus depreciation guidance.

The right lease structure can:

  • Affect eligibility for business deductions
  • Align with your ownership entity
  • Improve documentation supporting your tax position
  • Protect assets from unrelated liabilities

We often coordinate aircraft leasing with broader strategies such as asset protection planning and long-term business succession planning.

If your lease is part of a larger acquisition strategy, it may also intersect with aircraft purchase documentation handled through our aircraft purchase and sale legal services or ownership structuring reviewed on our aircraft ownership planning page.

Our Process for Structuring Your Wet and Dry Aircraft Lease

1

Strategic Consultation and Lease Review

We begin with your objectives. Operational needs, tax considerations, and liability concerns all shape the structure.

If a draft exists, we review it line by line and identify exposure points.

2

Drafting and Negotiation

As your aircraft lease negotiation attorney, we draft or revise the aviation lease agreement to:

  • Clarify operational control
  • Allocate maintenance and crew responsibilities
  • Address insurance and indemnity
  • Align the structure with your tax position

Every clause must support your business goals.

3

Integration With Your Broader Legal Plan

Once finalized, we integrate the lease into your overall framework.

That may include:

  • Ownership restructuring
  • Asset protection adjustments
  • Succession planning
  • Coordination with tax advisors

A well-integrated lease strengthens your overall strategy.

Structure Your Aircraft Lease Agreement Properly With Experienced Counsel

1031 exchange attorney Two business people engaging in a shandshake

Aircraft leases involve regulatory oversight, substantial capital, and ongoing operational risk. Precision matters. Speak with an aircraft leasing attorney who understands both aviation contracts and advanced tax strategy.

Call Allegis Law at (801) 938-4035 or take the next step below.

Protect your aircraft and aviation property with integrated legal, tax, and regulatory planning
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The information provided on this website is for general informational purposes only, does not constitute legal or tax advice, and does not create an attorney-client relationship. Consult qualified counsel prior to taking action on any information provided herein. Materials presented may contain AI-assisted or tool-assisted content.

For specific legal advice tailored to your situation, please schedule a consultation.
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Allegis Law, LLC. All Rights Reserved.

Allegis Law Logo
Located in Sandy, Utah;
Serving Clients Nationwide
9980 S 300 W #200,
Sandy, UT 84070
Hours: 9am - 5pm MST